Goldman Sachs economists predicted the creation of 750,000 new jobs in the United States in May, while the unemployment rate fell to 5.8%. Economists interviewed by Dow Jones had shown greater caution, estimating 671,000 new jobs, compared to just 266,000 that had been created in April. Citi, for its part, had estimated employment growth of 760,000 units, though putting its hands forward, and stating that particularly low employment numbers that disappointed the outlook could indicate that the Fed would not proceed with the tapering del Quantitative easing at least until next year.
The US employment report was finally released, and the number of new employees was disappointing: in May they created 559,000 new jobs.
Instead, it was better than expected the unemployment rate, down from 6.1% to 5.8%, compared to 5.9% of the general consensus.
In general the report indicates a fact, which is repeated from one part of the planet to the other: the American economy has not yet healed from the deep wound inflicted by the Covid-19 pandemic and the related lockdown measures.
Beware of workforce participation
Sure, as he wrote on Twitter Zach Moller di Third Way Economic the improvement in the US labor market has been solid, thanks to the speed of vaccinations in the United States. But Moller always stressed that “the participation in the workforce it changed little in May, confirming itself 1.7 percentage points below the level of February 2020 ″, preceding the pandemic.
In fact, there is to consider the number of those people who they have not actively sought a job in the last four weeks or who have not been available to work immediately in the same period of time: the inactive. The number of these people remained virtually unchanged at 6.6 million in May, confirming itself by 1.6 million higher than in February 2020.
This factor explains the labor force participation rate, which in May was 61.6%, compared to the expected 61.8%, 62.8% before the pandemic and 61.7% in April.
Another non-negligible factor, far from it: in the month, they were 7.9 million people who declared that they were not put in a position to work because employers had stopped their business activities, also due to the bankruptcy of companies.
The Bureau of Labor Statistics also wrote in the report that hourly wages, on average, and for all non-farm employees, they rose 15 cents to $ 30.33, after rising 21 cents in April. The trend of the last two months – the statement reads – suggests that “it is possible that the increase in demand for labor associated with the recovery from the pandemic has exerted an upward pressure on wages. according to the historians, the strong fluctuations in employment starting from February 2020 complicate the analysis of recent trends in average hourly wages ”.
Speaking of sectors, the creation of new jobs was mainly recorded in hotel and leisure sector, given that consumers, with the reopening of economies, have rushed back to bars and restaurants.
In this sector – -leisure and hospitality – payrolls jumped by as much as 292,000 units. The construction sector, on the other hand, witnessed a contraction of employment, equal to 20,000 units, mainly due to the losses accused by companies active in the non-residential sector: it is possible that the trend was mainly caused by the shortage of building materials that hit the builders.
Payrolls are also on the rise in the sector health care and social assistance (+46,000), as well as in the manufacturing sector (+23,000), transport and warehouses (+23,000), wholesale trade (+20,000) and professional and business services (+35,000).
Positive, but not too positive: ideal for Fed-drugged markets
The news not too positive arrived with the employment report – but not negative either – for now calm the nerves of traders, which had been shaken in the last few hours mainly by the anxiety of a more or less imminent tapering by the Fed of its Quantitative easing plan.
The anxiety had been rekindled by some rumors of the Wall Street Journal, according to which tapering is in fact already here. Jerome Powell & Co would in fact be ready to start gradually withdrawing at least i bazooka anti-Covid launched last year, primarily the ad hoc plan with which the Fed began to hoard corporate bonds and ETFs.
In spite of the rise in wages, the fear of inflation thus seems to subside: the rates on 10-year US Treasuries are in fact falling, and also falling below the 1.60% threshold, to 1.587%.
Even the decline in the dollar suggests that tapering is still far away for now: leuro strengthened by 0.43% to $ 1.2177, the dollar also falls against the pound, with the GBP / USD up 0.62% around $ 1.42.